Brown & Brown's (BRO) solid margin performance and continued focus on capital deployment were key positives in its Q2 results, even as organic growth softened, UBS Securities said Monday in a report.

UBS said management expects pricing trends to remain broadly consistent through H2, with excess-and-surplus casualty rates still rising amid a challenging legal environment. Brown & Brown plans to continue prioritizing share repurchases, internal investments and debt reduction while maintaining a focus on specialty businesses for mergers and acquisitions, the report said.

On Monday, the company posted adjusted Q2 EPS of $1.07, compared with UBS's estimate of $1.06 and consensus of $1.08. Organic revenue growth contracted from a year earlier and came in below expectations, driven mainly by weakness in the specialty segment, the report said.

UBS maintained its neutral rating on Brown & Brown stock with a $73 price target.

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